GM Unveils Plans to Transfer 1,100 Factory Workers to Other Plants

Popular automaker, General Motors (GM) revealed last Friday that about 1,100 existing employees have voluntarily accepted to be transferred to other plants.

At present, the company has about 2,700 open vacancies on U.S. soil. The manufacturing plants are scattered across various states like Michigan and Ohio. The company shared that plans were underway to absorb some of the employees as they look forward to cut about 14,000 jobs in North America.

Speaking to reporters, Mary Barra, the GM Chairman, and CEO, mentioned that their elaborate networks in both American and Canadian economies have provided them with avenues to avail these opportunities. She shared that the current set up would ensure that the company makes major strides in the years to come.

Barra insisted that despite the job cuts, GM was committed to providing employees with an array of options to facilitate a smooth transition.

Part of the rollout includes the creation of new job opportunities to various other GM plants. She pointed out the company was still steadfast in terms of collaborating with local authorities, workers unions and individual persons looking for the right opportunities.

A tweet posted on her on Friday sought to assuage the fears of employees who were unsure about whether the company cared about their plight. She stated that the c0mpany has plans for numerous employees working in impacted plants like Ohio, Michigan, Maryland and Oshawa, Canada.

Right Channels

The latest from GM comes just briefly after they filed layoff notices with the proper federal regulators. In sum total, about 14,000 salaried and hourly jobs were going to face the ax in both Canada and the U.S. markets.

Top industry analysts backed the move given the changing tides in the automobile world. The adoption of new disruptive technologies like automated driving systems and ride sharing concepts. In making the cuts, the company will be better placed to cushion the blows come what may. In so doing, they’ll have a solid footing to maintain a competitive edge over the short term which will create a solid platform for future growth.

The latest reductions could translate to a loss of about 8% of GM’s global employee base OF 180,000 workers.

While the move is perfectly okay from a company perspective, not everyone has agreed with the automakers latest move. Some critics ranging from politicians in the regions where the change is happening, to labor leaders and President Donald Trump, have all voiced their concerns about the new setup.

Trucks and SUVs

The restructuring efforts are significant in that they are a mirror image of the current state of North American auto markets. In review, October witnessed the emergence of trucks and SUVs as the dominant vehicles manufactured in the U.S. at 65 percent. To really get the gist of the situation, it’s perhaps best to recall that just 5 years ago, SUVs and trucks accounted for about 50% of the total vehicles produced.

As shared by Itay Michaeli, the famed Citi analyst, GM is focussing more on SUVs & trucks and less on cars since they don’t see much potential for growth in the sector. During his address, he divulged that he estimates sedans actually operate at a significant loss to the company. In essence, the company’s move was the right one to welcome the good-old classic case of restructuring.

In the reduction, about 8,000 white-collar employees will be cast away, a figure which represents a massive 15% of GM’s white-collar workforce in North America. The layoff will see a couple of people who will take buyouts while other will simply be laid off.

Increasingly, more manufacturers are shying away from cars and embracing trucks and SUVs as the preferred models.

In the factories, about 2,600 blue-collar employees are set to lose jobs in America. The situation is not much different in Canada where 3,300 workers are going to be laid off. However, some of them may get reabsorbed into the job market depending on the rate at which truck and SUV factories stabilize in terms of production.

Change

The cuts will also affect the company’s presence in the world. About 2 extra factories outside the North American region are set to be shut down by the end of 2019. There’s also set to be another plant closure in Gunsan, South Korea.

A number of other automobile makers are set to follow the same route used by General Motors Co. Ford Motor Co. is one of the other companies said to be formulating restructuring plans in a bid to lay off a number of white-collar employees.

On the other hand, Toyota Motor Corp is said to be aggressively engaged in talks to cut operating costs. This despite the fact that Toyota is currently making a new assembly plant in Alabama.